Avoid firm permit renewal hiccups
BOA Business
Anne Janotta Erickson, MNCPA membership marketing team leader | November 2020 Footnote
Editor's note: Updated October 30, 2020
The MNCPA and Minnesota Board of Accountancy (BOA) are two separate organizations with a shared interest in looking out for CPAs. That’s why, when the BOA notices trends among CPAs, we take note.
The backstory
The BOA one year ago made an observation regarding firm permit renewal. Renewal rates were ahead of the year before, which was great. The issue was tied to individual CPA certificate renewal in relation to CPA firm permit renewal.
You see, a CPA firm’s permit renewal can only be processed if there are enough specific CPAs within the firm who have renewed at the individual level. If a firm doesn’t meet this threshold, BOA staff have to reject and return the permit renewal application.
At the very least, a returned firm permit application is a hassle for the firm. But it could become a much bigger compliance issue if the firm fails to fix the problem and misses the renewal deadline altogether.
Avoid hiccups by understanding the rules surrounding firm permit renewal.
Firm permit renewal basics
CPA firm permit renewal is an annual obligation with a Dec. 31 deadline.
The individual certificates of specific CPAs that work within a firm can impact whether that firm’s permit remains compliant. This includes partners, shareholders, members, managers, directors and officers, collectively referred to as “owners” within the BOA’s firm permit renewal form.
By Dec. 31, two-thirds of a firm’s owners must have properly renewed their individual CPA certificate. Sixty days later (March 1, 2021), all owners’ CPA certificates must comply.
A CPA firm’s permit application will be returned if two-thirds of the firm’s owners have not properly renewed. Automatic revocation happens March 1 if the firm employs a CPA owner who did not renew properly.
Both scenarios hold true even if the firm’s permit was properly renewed.
No permit? Big problem
Operating without a firm permit is a big no-no.
Without a firm permit, a firm cannot operate or advertise (in any way) as a CPA firm, nor perform compilations, audits or other attest services. In other words, a firm’s livelihood is at stake.
Firm permit revocation is public record. Do you want your clients — or potential clients — to be aware of this mishap?
Making things right
Revoked firm permits cannot be reinstated administratively. It will take the action of the BOA’s board to be reinstated and an additional public order will be issued. This can only happen when the board holds a meeting, which is at least eight times each year.
This year …
- Encourage your firm’s CPAs to renew early.
- Not only does this help ensure compliance at the individual level, but it’s necessary for proper firm permit renewal, too.
- Did you know that CPA certificate statuses are public information? Visit the Find a CPA section of the BOA’s website to confirm that you or others in your firm have renewed properly.
- Update your firm’s roster.
- Include an updated firm roster with the firm’s annual permit renewal form. Why? Because a CPA owner who leaves a firm but fails to renew properly will impact your firm’s permit if they are still listed on the roster. Pay close attention to CPAs who have retired since last year’s renewal.
Questions?
The Minnesota BOA issues CPA firm permits. They can be reached at 651-296-7938 or
www.boa.state.mn.us.
The MNCPA is here to help. Reach out with firm or individual renewal questions at 952-831-2707 or
customerservice@mncpa.org.
